Chapter 2Reporting in 2021–22
COVID-19 pandemic response
2.1The residual impact of the COVID-19 pandemic on agencies continued to be a dominant focus during the 2021–22 reporting period, with focus on adapting long-term hybrid work structures, and the mental health and wellbeing support provided by departments during this period.
Information required by other legislation
2.2All Commonwealth entities are required to report against other legislation that directly applies to them as set out in their respective Administrative Arrangements Orders, including the Work Health and Safety Act 2011 (WHS Act) and Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act).
Work Health and Safety Act
2.3Due to the events of 2021–22, employees have had to adapt to hybrid arrangements. Annual reports provide insight into how Commonwealth entities have operated during these times in accordance with the reporting requirements of the WHS Act section 4(2):
The matters are:
(a)initiatives taken during the year to ensure the health, safety and welfare of workers who carry out work for the entity; and
(b)health and safety outcomes (including the impact on injury rates of workers) achieved as a result of initiatives mentioned under paragraph (a) or previous initiatives; and
(c)statistics of any notifiable incidents of which the entity becomes aware during the year that arose out of the conduct of business or undertakings by the entity; and
(d)any investigations conducted during the year that relate to businesses or undertakings conducted by the entity, including details of all notices given to the entity during the year under Part 10 of this Act; and
(e)such other matters as are required by guidelines approved on behalf of the Parliament by the Joint Committee of Public Account and Audit.
2.4All the Commonwealth entities reported on the above matters to varying extents, including reporting on the impact of COVID-19 in adapting to hybrid working environments. Specifically, reports noted:
expansions of ICT remote working capabilities, including software upgrades and training and support documentation; and
several entities introduced wellbeing programs designed to engage and keep colleagues connected and supported during the pandemic as well as support staff both physically and mentally.
Environment Protection and Biodiversity Conservation Act 1999
2.5Commonwealth entities and companies are required to report against the EPBC Act in accordance with the following requirements:
(a)Include a report on how the activities of, and the administration (if any) of legislation by, the reporter during the period accorded with the principles of ecologically sustainable development; and
(b)Identify how the outcomes (if any) specified for the reporter in an Appropriations Act relating to the period contribute to ecologically sustainable development; and
(c)Document the effect of the reporter’s activities on the environment; and
(d)Identify any measures the reporter is taking to minimise the impact of activities by the reporter on the environment; and
(e)Identify the mechanisms (if any) for reviewing and increasing the effectiveness of those measures.
2.6With the exception of the National Competition Council, Australian Office of Financial Management and IP Australia, all Commonwealth entities reported against the above requirements to varying extents. The main reporting focused on continued energy efficient improvements at office locations.
2.7A potential explanation of the missing section for the National Competition Council is that the majority of its administrative reporting is undertaken by the Australian Taxation Office. Regarding the section missing from IP Australia’s reporting, this section requirement may have been overlooked as this is the first time IP Australia undertook its own annual reporting, since being separated from the Department of Industry, Science and Resources.
Significant changes
17AF(2) significant changes in the financial results for non-corporate commonwealth entities
2.8Included in the detailing of non-corporate commonwealth (NCC) entities’ financial performance, several entities noted either a surplus or deficit as results of varying reasons. If there are ‘significant changes in the financial results during or after the previous or current reporting period’, then Rule 17AF(2) is applicable to NCC entities.
2.9Eight NCC entities formally indicated reporting against this requirement—
Department of the Treasury (Treasury);
Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB);
Australian Taxation Office (ATO);
Tax Practitioners Board (TPB);
Australian Office of Financial Management (AOFM);
Australian Prudential Regulation Authority (APRA); and
Department of Industry, Science and Resources (Industry).
2.10Treasury noted a small deficit in the 2021–22 reporting, compared to the previous year’s reported surplus. This change was attributed to reclassification of cloud-based software projects, partly offset by employee provision revelations.
2.11AASB and AUASB recognised total comprehensive deficits. The AASB’s deficit was noted ‘as a result of increased employee costs and a reduced management fee revenue’; the AUASB noted their deficit ‘can be attributed to the additional costs of operating the standards portal and increased employee costs’. Both entities also recognised that travel costs were incurred compared to the previous years reporting due to the recommencement of travel post COVID-19 restrictions.
2.12The Australian Taxation Office (ATO) reported a deficit in 2021–22 due to factors requiring the agency to be ‘flexible and adaptable in re-directing resources to address emerging priorities’, and specifically noted that these emerging priorities included impacts caused by the COVID-19 pandemic and the recent natural disasters. The ATO noted a total operating deficit of $39 million or 1 percent over the operating budget for 2021-22. The Tax Practitioners Board indicated in their annual report that the agency’s significant changes were incorporated into the ATO’s reporting deficit.
2.13The Australian Prudential Regulation Authority (APRA) noted a surplus ‘due to the deferral of some activities into the 2022-23 financial year and a rise in the Government 10-year bond yield reducing the valuation of employee leave provisions’.
2.14The Department of Industry, Science and Resources (DISR) recorded a surplus of $39.4 million in 2021-22 after excluding depreciation and amortisation and the impacts of the AASB Standard 16 leases accounting adjustments, as well as delays in the implementation of various budget measures.
General reporting observations
2.15In terms of reporting overall, the majority of Commonwealth entities across both the Committee’s portfolio responsibilities included all their mandatory reporting requirements.
Recording the part of the report in the compliance checklist
2.16The non-corporate Commonwealth (NCC) entities Resource Management Guide No. 135, and corporate Commonwealth (CC) entities Resource Management Guide No. 136 state that ‘[e]ntities must also provide details of the location of the information in the annual report that addresses each of the mandatory requirements specified by the PGPA Rule’. In addition, the guides note that ‘[t]he information in entities’ annual reports should be able to be easily accessed by the reader’.
2.17The committee notes that the entities’ listed below have chosen not to reference their adherence to the compliance checklist using page numbers, but instead only give reference to the chapter the information is located:
Treasury;
Royal Australian Mint (RAM);
Commonwealth Grants Commission (CGC);
AOFM;
APRA; and
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
2.18Further, some entities only included the heading to the section or chapter, which required the reader to search through multiple pages in order to locate the exact information. The CGC provided no reference to any item in the compliance checklist, with the compounding issue of giving no confirmation as to whether the non-mandatory items were applicable to the agency. The committee urges the use of page numbers to help assist the reader to identify where items are in reports.
2.19The TPB annual report and the Australian Charities and Not-for-Profits Commission (ACNC) annual report provided page number referencing to their compliance checklist, but a majority of their compliance checklist referred to the ATO’s compliance reporting, without providing the page number reference for that annual report.
2.20The committee encourages the entities who require sections of their compliance checklist to be completed by another agency to collaborate on efforts to include specific page numbers of that agency in their checklists for greater transparency and accessibility by the reader.
Omitting non-mandatory items in the compliance checklist for corporate Commonwealth entity
2.21The Corporate Commonwealth Entity Resource Management Guide No. 136 states that a ‘list of requirements should be included as an appendix to the annual report. If an item specified in the checklist is not applicable to an entity, it should be reported as “Not Applicable” rather than omitted from the list’.
2.22There were two corporate Commonwealth entities who omitted section 17BF from their compliance checklists. As this section was not a mandatory reporting requirement, the committee appreciates that it does not apply to the entity. However, the committee considers that all reporting sections should be included in annual reports with the indication where a non-mandatory reporting requirement has not been completed.
17AG(2A)(a) charter address for audit committee missing from report
2.23The mandatory compliance item 17AG(2A)(a) relating to a direct electronic address of the charter determining the functions of the entity’s audit committee was unable to be located in the CGC annual report. In the absence of a reference to direct the reader to the location of the item in the report, it was unable to be located.
2.24The committee strongly encourages the CGC to ensure that they have included all mandatory requirements in their reports, and appropriately reference each item for the reader to easily locate items within the report.
Error in compliance checklist
2.25There was one entity where it was apparent an error had occurred within their compliance checklist. The Royal Australian Mint displayed an incomplete referencing list to the items in their compliance checklist. The committee encourages all entities to ensure that all reports be checked for errors prior to publication.